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Blog: Five Reasons Why You Should Work with The Public Sector in 2022

Growth Hub Blog 1/11/2022 12:00:00 AM

Why 2022 may be the year to work with the public sector

It is well known that the public sector is a large market for companies to tap into, with high demand for a variety of products and services. Many smaller firms are reluctant to consider the opportunities within the public sector, believing that contracts are only awarded or only suitable for large multinationals. Here Cheshire and Warrington Growth Hub explain why this is not the case and why 2022 is the year for your business to try and access the public sector market.

  1. The Public Sector has a LOT of opportunities

If you were told about a customer who had £6bn worth of contracts in one year, you would likely be interested in finding out more. Last year, the NHS spent almost £6bn on ‘hospital consumables’ and in the same year the MOD Core Department placed 864 new contracts with SMEs worth £1.2 billion. These are just two examples of goods and services bought by the public sector in one year, with a range of government departments, public sector organisations and local authorities, there really are so many opportunities for your business.

  1. The Public Sector Wants to Work with SMEs

Whilst large companies may be needed to deliver certain contracts, the public sector is actively looking to work with small and medium companies, in fact, there are targets and incentives in place to help them do just that, one example is: the MOD has a target that 25% of its procurement spend will go to SMEs by 2022. Each government department have appointed SME Champions to lead on supporting SMEs and have also created their own individual plans to work with SMEs.

 

  1. Even Big Contracts Need Smaller Suppliers

HS2 is a multi-billion-pound project, which is being delivered by some of the UK’s biggest (Tier 1) construction and engineering firms. However, those firms have a supply chain (Tier 2) helping them deliver the project and are seeking SMEs to get involved, with recent requests for suppliers of fencing, first aid equipment and fire safety equipment. There are many large construction and infrastructure projects that have opportunities within their supply chain for smaller and local businesses.

 

  1. Getting Paid

According to a report from the Federation of Small Businesses, one-third of payments to small businesses are late, which obviously can have a massive effect on cashflow and day-to-day running. Whilst there are measures you can take to obtain late payments from customers, avoiding late payment at all is obviously the best option. The Government has a target of paying 90% of its invoices within 5 days, and all of them within 30 days. The Government also ensures good payment practice is passed down to small subcontractors, by preventing some suppliers who do not comply with the Prompt Payment Standard from winning government contracts.

  1. It Can Help Showcase Your Business

By completing tender responses and developing your social value policy, you are also developing compelling resources to use when competing for private sector work. A lot of the information needed for public sector procurement can be used for private sector quotes, reducing the time spent submitting them and helping you showcase your offering in the best way. A strong social value policy is becoming of increasing importance to the private sector, with larger businesses keen to ensure their supply chains can show ethical, environmental, and sustainable good practices. Social value is fundamental to working with the public sector, so once you secure public sector work you should easily be able to show your private sector customers your social value credentials too.

 

If you are interested in finding out more about working with the public sector then join our webinar “Bidding for Public Sector Contracts” on the 15th February.

 

Sources:

https://www.instituteforgovernment.org.uk/explainers/nhs-procurement

https://www.gov.uk/guidance/small-and-medium-business-hub#history

https://www.competefor.com/hs2/

https://www.fsb.org.uk/resource-report/time-to-act.html